Virgin Sees First Signs of Recovery

4th Nov 2003

Virgin Atlantic Airways today announced a year on year increase in premium traffic of 10% in the three months August - October. In markets which remain very tough this increase is driven by a mixture of Virgin’s capacity growth and a significant market share shift from BA to Virgin. The trading period is the crucial quarter in the airline industry as business travellers return following the summer.
- 10% year on year growth in business travellers
- driven by mixture of capacity growth and market share shift from BA
- halo effect of new Upper Class Suite

“These are encouraging figures which suggest both the beginning of the recovery of the business travel market and the early signs of a market share shift to Virgin since the launch of our new Upper Class Suite. However, our yields are down on previous years forcing us to maintain a tight control of our costs.

“Although we’ve yet to fit our new Upper Class Suite across the fleet the halo effect of our revolutionary new seat is already at work and we’re seeing real market share shift from the American carriers and BA in the last few months. It gives us real confidence that across our network our new Upper Class Suite will help us take £100million of revenue per year from BA.

“Our new Upper Class Suite is now flying daily to and from New York and with the retirement of Concorde we expect Virgin’s Upper Class to be the natural replacement for Concorde travellers as well as BA’s and other airlines’ First and business class passengers.
“Even though the market has been weak in recent months we’re making a conscious decision to invest now in new products and new planes to take advantage of the returning market. As we move towards further growth in the business travel market in simple terms our bigger beds will give us a bigger share of a bigger market.”
Richard also spoke about the general state of the long haul travel market:

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“In the last couple of years the long haul market has been battered by adversity and has seen a real drop in revenue. What all airlines need now is a period of stability, free from any new turbulence, to allow an improved return on our investment. Fortunately, for the first time in months, the early signs are that better times may be ahead.”——-